Tech stock crash1/13/2024 ![]() ![]() It is a brilliant marketing strategy that allows people to earn crypto by taking free courses on Coinbase's platform. To give you an example: what first got me interested in COIN was the Coinbase Earn marketing program that kept appearing in my YouTube ( GOOG) ads. The exchange is what gets people in the door, but it is just one piece of the puzzle. You get the point: it is wrong to perceive COIN as just another exchange. Today, already, COIN has many other products to complement its exchange: The CEO has himself explained that their goal is to become the "Amazon ( AMZN) of Crypto", and I think that they are on track to achieve that. It is becoming a "one-stop-shop" for everything crypto-related. The exchange business is highly competitive and while I think that COIN has a narrow moat (from its first-mover advantage, trusted reputation, innovative tech), it is not compelling enough to invest just based on that.įortunately, COIN is much more than just an exchange. COIN also offers Ethereum ( ETH-USD), Solana ( SOL-USD), and all other major currencies on its platform, so its reliance on Bitcoin will only continue to decrease over time.īut if that was all, I probably wouldn't invest. That's the primary, but not the only reason why I think that COIN is a better investment than Bitcoin itself. Whether you are bullish on bearish on crypto as investments, COIN can profit as long as you agree that crypto is here to stay for the long run. It profits from transaction fees, which may even grow during times of market volatility. As an exchange, COIN makes money whether Bitcoin drops or rises. In reality, COIN isn't dependent on Bitcoin. You can see a clear correlation in the chart below: When Bitcoin rises, COIN also rises, and when Bitcoin drops, COIN drops as well. The market has for whatever reason treated COIN as if it was a derivative for Bitcoin ( BTC-USD). I think that this is an opportunity and here is why: It is one of the most popular crypto stocks and it has been getting a lot of coverage after its recent collapse from $430 all the way down to ~$200 per share. Coinbase ( COIN)ĬOIN probably doesn't need an introduction here on Seeking Alpha. The ARK Innovation ETF ( ARKK), which is a collection of some of the most popular tech stocks, has dropped nearly 50%:įollowing this crash, I still think that most tech stocks remain overpriced, but I have now begun to buy the dips and in what follows, I highlight two tech stocks that I bought recently. It has gotten so bad that some call it the dot-com crash 2.0. Many of the most popular tech stocks like Zoom ( ZM), DocuSign ( DOCU), and Alibaba ( BABA) have collapsed. Since then, things have changed quite drastically. Allocations to real assets are rising rapidly and at least a portion of this capital is coming from tech stocks: The end of the pandemic will ultimately benefit REITs, but hurt tech stocks that benefited from it.Īnd finally, in a world of ultra-low yields and high inflation, REITs had substantial upside (and still have), but tech stocks were more at greater risk. With market caps in the 100s of billions and even trillions, the growth of tech stocks will inevitably slow down as size is the enemy of growth. Tech stocks have historically been poor performers following periods of bubbly valuations. The valuation discrepancy had grown historically large. To restore true prosperity to the country, government and business leaders must take steps to rein them in.In March 2021, I explained in an article that, unlike most other investors, I tend to avoid exciting tech stocks and instead invest most of my net worth into boring real asset heavy businesses like REITs ( VNQ).īack then, I argued that REITs should pummel tech in the years ahead because: Because they extract value rather than create it, their overuse undermines the economy’s health. Buybacks contribute to runaway executive compensation and economic inequality in a major way. Why are such massive resources dedicated to stock buybacks? Because stock-based instruments make up the majority of executives’ pay, and buybacks drive up short-term stock prices. That left little to fund productive capabilities or better incomes for workers. Dividends absorbed an extra 37% of their earnings. During that period, they used 54% of their earnings-a total of $2.4 trillion-to buy back their own stock. Take the 449 firms in the S&P 500 that were publicly listed from 2003 through 2012. ![]() ![]() One of the major causes: Instead of investing their profits in growth opportunities, corporations are using them for stock repurchases. While the top 0.1% of income recipients reap almost all the income gains, good jobs keep disappearing, and new ones tend to be insecure and underpaid. Though corporate profits are high, and the stock market is booming, most Americans are not sharing in the economic recovery.
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